Many e-tail questions, few answers

This is an excerpt of the original article. It was written for the May-June 2018 edition of Supply Chain Management Review. The full article is available to current subscribers.

May-June 2018

Last month, I was in Atlanta at the Modex trade show. In one sense, it is a tribute to the automation technologies managing today’s distribution networks. And, I’m not only talking about automated materials handling systems, but also the software and NextGen technologies such as robotics, wearable technologies, including smart glasses and augmented reality solutions and sensors enabling the Internet of Things. In another sense, all of these solutions are coming together to drive fulfillment. With the increase in e-commerce, getting the right product to the right customer at the right time has never been more important.

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Given the number of deliveries each of us receives from Amazon, it’s hard to remember that between 2000 and 2002, the first wave of online retailing crashed as the dot.com bubble burst. Many of the failed online retailers suffered from a lack of basic logistics knowledge that contributed to their demise.

What was taking place in the online retail marketplace at that time? For starters, early online retailers were typically funded by readily available investment capital and supported by financial markets that rewarded rapid growth over sound business plans and profitability.

As online sales exploded, many misguided investments were made in transportation and warehousing assets. Price competition between online retailers was brutal, and free shipping and returns crept into the marketplace as online sellers looked for ways to differentiate themselves from their competitors. As this was happening, traditional brick-and mortar retailers were developing their own strategies to cope with the new competitive environment. The fulfillment space became increasingly crowded.

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